Rating agency Crisil on Thursday said that the Indian mutual fund industry’s assets under management (AUM) surged to a new record high and surpassed the Rs 13 trillion mark, in July. According to Association of Mutual Funds in India, AUM rose 12.23% or by Rs 1.44 trillion to Rs 13.17 trillion. The increase was led by liquid, income and equity funds.
According to data release by Crisil, gold exchange traded funds (ETFs) continued to lose lustre as negative sentiment for the underlying asset class weighed on the category’s assets. Sharp drop in price of gold led AUM fall 8.58% to Rs 59.57 billion in July. The price of gold (represented by the CRISIL Gold Index) fell 7.80% in July. Cumulative outflows total Rs 40.19 billion.
A Crisil report reveals that assets in liquid funds’ grew by Rs 936.03 billion and in equity funds’ rose by 5.67 per cent to a record high of Rs 3.93 trillion in the month gone by. Equities aided balanced funds, which invest its assets majorly in equity, reported inflows worth Rs 13.59 billion. The total valuation grew 7.10 per cent to Rs 345.50 billion.
The Crisil data showed that cyclical inflows worth Rs 898.25 billion made liquid funds the biggest contributor to the industry AUM in July. The category’s assets swelled by Rs 936.03 billion, helped by inflows and mark-to-market (MTM) gains, to Rs 3.01 trillion. Equity funds’ AUM marched toward the Rs 4 trillion mark helped by MTM gains and inflows. AUM rose 5.67% or by Rs 211.14 billion to a record high of Rs 3.93 trillion in July.
Increasing popularity of equities aided balanced funds, which invest a major portion of their AUM in equity. The category attracted inflows of Rs 13.59 billion, 14th consecutive month of inflows, in July. Inflows and MTM gains led the category to scale a new high of Rs 345.50 billion, up 7.10% or by Rs 22.91 billion.
Income funds attracted strong inflows of Rs 216 billion, highest since October 2012, amid hopes of more interest rate easing by the Reserve Bank of India (RBI). The central bank, however, maintained a status quo in its latest policy meeting on August 4. Income funds’ AUM rose 5.08% or by Rs 268.53 billion to Rs 5.56 trillion on the back of strong inflows and MTM gains.
Gilt funds witnessed inflows of Rs 1.91 billion in July, reversing outflows of Rs 2.79 billion in the preceding month. Inflows clubbed with MTM gains helped the category’s assets rise 2.74% or by Rs 4.17 billion to Rs 156.10 billion.